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Article: What Is KPI in Marketing & How Do You Measure?

What Is KPI in Marketing & How Do You Measure?

When you are working closely with marketing, you will constantly hear about KPI and how people use it to measure a company's success. Let's find out more!

Control and evaluation are important to function in management to make sure that the organization's working plan runs well so that the final objectives will be achieved at the end. aIn order to do the control function effectively, a well-planned working performances system is needed. This system should be able to describe the business process involved in the company thoroughly. Working performances system can be measured by using KPI (Key Performance Indicator). 


What is KPI and Why is It Important in Running A Business

KPI or Key Performance Indicator is a measurement that describes the effectiveness of a company in achieving its goals. Companies use KPI as a tool to measure the success of their target achievement. KPI has a very significant role in developing a business. Therefore, in defining the KPI, a company should include its vision and mission vividly and also the practical steps to realize the objectives of a company. Since KPI is a measuring tool of working performance of a company, KPI should represent the objectives that a company wants to achieve. 


KPI in Marketing 

KPI in marketing is a numeric marketing measuring tool that is used by a company to measure the progress of fulfilling the target from the marketing department. A company may create adjustments for the strategies applied as well as the budget available by using the appropriate KPI in marketing. Without the appropriate KPI, a company may make a report based on invalid data or information. 

1. Traffic

How many people visit your website or visit your store is measured by traffic. You can make your KPI like this: website visitors in a day, in a week, and so on. Or store visitors in a day, week, and so on. 

2. Ratio Traffic to become a prospect

By looking at your traffic, then you can recognize how many of your visitors become prospective customers. If you find out that your traffic rate is up but the ratio of prospects is going down, there must be something wrong with the website or shop you are running.

3. Cost per prospect

After determining the traffic who become prospects, then you can count how much money you should spend for every prospect.


4. People’s memory toward the brand

You can measure how much people recognize and remember your brand. At this point, you can see how effective your marketing strategy is in making people recognize and remember the brand.

5. Mention at Social Media 

How many “mentions” on social media could be one of your KPIs in marketing. Sharing it with prospects and customers, which are obtained from every social media, and the percentage of traffic related to the social media will ease you in determining the focus of the marketing strategy.

6. Net Promoter Score (NPS)

This one measures the possibility of your customers suggesting your products to their colleagues or acquaintances. You’d better see the number of NPS in terms of 30 days to make your KPI in marketing relevant.

7. How long do people stay on your website

When people only visit your website for a few seconds, it means that they won’t be your prospects. And that should make you include advantageous links to your website to attract more visitors and turn them into prospects. 

8. Sold products rate

Sold products are affected by some factors such as the prospect quality, the products’ charm, competitive price, and your business reputation. This is also affected by your ability to turn your qualified prospects into customers. Though some people would call this KPI in sales, marketing has an important role in realizing it. 

9. Loyal Customers

The number of loyal customers which is consistent, or even tends to increase shows that your products have given important value for the customers which they don’t get from other products, and they feel satisfied with your offer. 

10. Return of Investment (ROI)

When you apply ROI in marketing, you should take it as an expense rather than an investment. The value of the loyal customer and the value of the brand may not have measured impact, but both are important factors to be counted when doing the ROI evaluation. 


Measuring Your Digital Marketing Activity 

Understanding which one is successful and which one is not is from every marketing activity you do is an important part of being able to develop a perfect business strategy for your company. For that reason, you need to understand well what KPI in marketing is and everything related to it.

1. Lead Generation

As you increase the leads, your sales rate would apparently increase as well. Therefore, measuring the lead generation strategy is important to increase sales. There are some metrics that you can use to optimize the lead generation strategy you make. 

1.1 Monthly New Leads

This metric indicates how many leads you can get in a month. Lead could be someone who signs up to get a free trial or someone who creates an account at your online retail site. When you want to measure it, you can you pipeline management software like Hubspot, Agile, or Salesforce to help you get the newest data and sort the data based on a certain period of time. To optimize it, you can increase the budget for cost-per-click from the campaign, create SEO-friendly contents to be easily found on search engines, offer a new discount.

1.2. Qualified Leads per month

This KPI would see successfully qualified leads. It helps you to see whether the campaign you make has an effective impact or not in reaching the correct lead target. The potential customers could be categorized into three groups as follow:

    • Marketing qualified leads (MQL) — forwarded leads to the sales team by the marketing team.
    • Sales-accepted leads (SAL) — accepted prospects by the sales team, and follow-up will be executed immediately.
    • Sales qualified leads (SQL) — leads that have big potency to be customers.

How to measure: categorize all leads that you get into the sales funnel

How to optimize: make a campaign with a specific audience target.   

1.3. Cost per lead (CPL)

CPL is a digital marketing KPI that indicates how much budget is needed to get new leads. This metric is used to see whether the marketing strategy you’ve done has brought benefits for the company. 

How to measure: sum up all the time, effort, and budget you’ve made and compare with monthly leads you resulted from those activities. 

How to optimize: identify which campaign has the best result, then allocate more budget to that campaign.

1.4. Cost per conversion

This KPI in marketing measures how much budget is needed to turn leads into customers already. Though a campaign may get thousands of leads, only a small number of them would be the client finally. If you apply a lower cost per conversion than customer lifetime value, then your strategy should be reviewed. 

How to measure: count the budget you spend on the source of lead acquisition like campaign ads, blog content, social media management, and any other sources. Then identify how many leads have become customers from every source. Divide the total budget of lead per month from every source by the conversion number to get the budget you spend to get a new client. 

How to optimize: create a campaign with a specific target audience, fix the user experience from your products or services. 


 2. Website and Traffic 

2.1. Monthly website traffic

Besides observing the whole traffic from the website every month, you should pay attention as well to the number of visits from every page category such as homepage, blog, landing page, and other categories. The data can be used to evaluate which page has resulted in the highest conversion rate. 

How to measure: use analytics tool websites like Google Analytics.

How to optimize: to increase the traffic, you can do the paid search campaign or do the SEO business to get more visitors in organic searching. 

  •  Returning vs. New Visitors

By measuring the percentage of returning visitors, you will see how much your audience engaged with the content on your website. The low return rate on the blog page could be used as the indicator that the content you make is not interesting enough for the audience to go back and visit your website again. 

How to optimize: provide useful information on the blog or landing page that you make. You can also do remarketing ads to remind the visitors of the brand, products, or services that you offer.

  •  Website and Conversion Rate

Evaluating which page has gained the highest conversion can help you to determine what content is the most effective in gaining conversion.

How to measure: Google Analytics will enable you to acknowledge the conversion rate from every page. 

How to optimize: do the experiment on various elements in the landing page to increase the conversion rate, for example, by changing the CTA, adding pictures, or changing the copy page.

  •  The Average Time Visit

One factor that Google considers in defining the ranking on the search result is the relevance of the page and the keyword in searching. Therefore, paying attention to the time visit from every page has become very important, especially on the organic traffic. The longer the visitor visits a page, the better it is. 

How to measure: use Google Analytics to see the average number of time visits from every page of your website.

How to optimize: provide interesting and useful content on your website. Add visuals like pictures or videos to attract visitors to the landing page. 

2.2. Search Engine Optimization (SEO)

    Organic traffic, which comes from search engines, is a valuable asset in digital marketing. Some SEO KPIs below focus on the quality measurement and the quantity of organic traffic on your website. 

    •  Traffic from organic search

    The SEO metrics here indicate the number of visits per month from your website, which comes from searching through a search engine like Google, Bing, and others. 

    How to optimize: improve your content and apply best practice SEO to get a better ranking for the searching result.

    •  Page Authority and Domain Authority

    Higher page authority and domain authority would help your content to get a good performance on the search engine result. You can observe both metrics by using some tools like Moz, SEMRush, Ahrefs.

    How to measure: use browser extension Moz to enable you to look at page authority from every website page.

    How to optimize: enrich the internal links which lead to your website page. In addition, you can also apply strategy off-page SEO in order to increase page authority and domain authority. 

    •  The Rising Ranking from Target Keywords

    When a user searches using Google, there is a small chance that he will continue to the next page of searching. Therefore, recognizing the search rank from your website page is important to identify the performance of your SEO. 

    How to measure: you can use Google Search Console to see the performance of your website page. 

    How to optimize: applying on-page SEO technique is an effective way to raise the ranking of the search result of your page.

    •  The inbound link leads to the Website.

    Focus on measuring the qualified inbound link from your website page, which has a high rate of searching rank. The number of received inbound links could be the parameter of how often your content has been shared by other websites. Besides, the inbound link could be used as an indicator of how much does your website affects a certain industry. 

    How to measure: use SEO tools like Moz, Alexa, SEMRush, or Ahrefs to crawl your website and see how many inbound links are received.

    How to optimize: as your inbound link number increases, it will increase the brand reputation as well. Therefore, build your brand as an expert by publishing articles, whitepapers, study cases, and reports.


    3. Online Advertising

    Many businesses fail in doing online marketing just because they do not pay attention to evaluating the profitability ROI from the applied strategy. Apply the KPI in marketing for online ads to make those activities more effective and efficient. 

    •  Leads and Conversion from Online Ads

    Watch closely the number of leads and conversions from your online ad monthly. Not only to measure the success of your online ads strategy but also to help you compare the performance of paid marketing and non-paid marketing strategy. 

    How to measure: if you use Google Ads, you can see the performance through Google Analytics.

    How to optimize: improve your copy and online ads visual and only use relevant keywords with the product and services you offer.

    •  Cost per Conversion (PPC)

    Making leads and new customers from PPC ads may take a lot of budgets. Therefore, it’s important to measure the ROI from the PPC ads strategy you created. Try to compare the number of cost-per-conversion with the customer lifetime value to make sure that the ads campaign that you create would benefit you for the long term. 

    How to measure: it’s better to measure this kind of KPI in marketing in term of once in two months since taking the leads into customers take time. 

    Calculate all the expenses you make at the ads campaign, then divide the number by the number of clients or new customers that you get. 

    How to optimize: you could improve your landing page so that the visitors will be more convinced to give their personal information to your business.

    •  Click through Rate (CTR)

    This online ads KPI will give a big picture of the effectiveness of the PPC campaign that you create. If your CTR number is low, it could be an indicator that the ads content that you create is not effective enough to intrigue the user to get into your landing page. 

    How to measure: every platform commonly provides CTR data from every ad that you are running.

    How to optimize: do new experiments regularly on the online ads like changing the ads visual to be more interesting, improving the copy, changing the CTA, and many more. 


    4. Social Media Marketing

    Applying social media marketing will help you a lot in enhancing brand awareness, building new communities, which lead to prospective customers.  

    Apart from that, here is the KPI in marketing for social media marketing that May help you in measuring the effectiveness of the strategy you apply.

    •  Audience Size

    Observe the number of followers every month to measure how big your audience is. As the number keeps rising, it indicates that your contents are attractive enough for your audiences, and it can attract new audiences as well. 

    How to measure: Use social media marketing tools such as Later and Buffer to help you observe the engagement data and the increasing number of followers. 

    How to optimize: share the original content, create social media campaign with set target audiences. 

    •  Engagement Rate 

    The engagement rate shows the number of people who actively interact with your posts. The interactions could be in the forms of likes, clicks, comments, or sharing your posts. 

    How to measure: sum up all the interactions you’ve had for every post you make and divide it with the number of your followers. 

    How to optimize: create interesting contents which invites the audiences to leave comments or even share the posts on their account. 



    Tracking and observing all the KPIs in marketing seems complicated. Yet, by measuring those metrics, your marketing strategy would be much measured. And it will lead you to the creation of the most effective marketing strategy to be applied.  

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